ECONOMYNEXT- Sri Lanka has requested proposals from banks to manage an exchange restructured bonds as the Indian Ocean island begings talks to re-structure international sovereign bonds this week.
The firm should have experience being a “Dealer Manager or similar in sovereign bond exchange
offers, consent solicitations and other liability management exercises in relation to
sovereign bonds” within the last five years, a notice posted on the Finance Ministry website said.
Applications should submit a proposed execution strategies for the Exchange Offer, including proposed execution timeline and strategy for maximizing the chances of success of the Exchange Offer.
Sri Lanka is starting discussions with bondholders this week in London to restructure bonds.
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According to previous information as least a 30 percent hair cut and cuts in coupons are requested.
Sri Lanka’s sovereign bonds are now being quoted at around 58 to 59 cents to the dollar.
Bondholders are keen to have so-called GDP linked bonds tied to economic performance, though Sri Lanka is not keen on so-called ‘downside bonds’ initially proposed.
The exchanged bonds also have to be comparable to that of the bilateral creditors.
The finalization of bilateral creditors may also await the terms of an in-principle deal with the sovereign bondholders, Indrajit Coomaraswamy, an advisor to Sri Lanka’s government said last month.
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President Wickremesinghe has said he hopes to wrap up bond restructuring by June-July before elections.
(Colombo/Mar18/2024)